03 – 12 SETTLEMENTS INFRASTRUCTURE Facing affordability challenges Affordable housing developers, industry stake holders, govern- ment’s land acquisition agency, municipalities and financial sector investors attended the 2nd annual Affordable Housing South Africa 2012 summit, which took place at Gallagher Estate in Midrand, on February 28 and 29 2012. subsidised RDP units. MDV Developments are rolling out the first of the affordable bonded units in Klarinet. overnment’s land acquisition unit, owned rather than a parastatal, the Housing Development Agency as the latter’s mandate is to G(HDA), is tasked with delivering well make a profit.” located land for the Department of Human But the fact is land procla- Settlements. CEO, Taffy Adler told delegates mation, valuations, EIA’s, land at the housing summit, “Government is com- disposal, transfer and planning mitted to upgrading 400 000 units by 2014, can take up to ten years to com- which is the end of the current term in office. plete before the developer can start He says that the HDA is currently iden- building. “The HDA often act as the agent tifying state owned land but communal and would approach Public Works, the City and privately owned land is not within their Council and the Province and, as a service, sights. The State owns 700 000 properties assist in the release of land into the market around the country – although we may not for development.” Dzivhuluwani says that the Municipality will being planned. There are 8 000 subsidised get an inventory. In the last two years, the Agency has roll out Spring Valley Affordable development RDP units, 1 500 rental stock and 2 500 Tokyo Sexwale often makes a point that worked with 530 state owned properties, and the integrated mixed use project will yield bonded units. informal settlements are formed where 14 416ha – which equates to 800 000 units. 2 700 fully bonded units, and 1 300 rental Ulrike Rwida, Director of Housing & there are job opportunities, and this is most Mashila Dzivhuluwani, Head of Housing for opportunities. The region has a population of Infrastructure: Project Support Urban certainly the best place for them. eMalahleni Local Municipality in the Witbank 535 217 people and housing has to meet the Developments & Infrastructure, says that “Coming from an NGO background, this coal belt, discussed a number of exciting in- increased demand. At Uthingo Park, the inte- there will be public consultation at the end is my first exposure to government and tegrated human settlements, which include grated development will provide 1 000 bonded of March 2012 to discuss tax incentives I have learned all about bureaucratic logic. Absa Devco’s R3,5 billion project in Klarinet. units, 3 000 rental opportunities as well as for the industry. She is keen to engage with Developers can acquire land from govern- This project will yield 11 969 housing oppor- 1 000 government RDP units. Dzivhuluwani developers and contractors, so that they ment or from a state owned enterprise, tunities, a mix of 2 322 rental units, 3 948 is keen on public/private partnerships and at can “tell us what we have to do to make it but it’s almost easier if it is government fully bonded houses and 5 699 government Emsagweni there are 12 500 integrated units work for them.” Social housing precinct The social housing project at t the recent launch, Minister of Human for housing finance from banks - we need to Settlements, Tokyo Sexwale, said that have more of these rental housing projects.” Southernwood Square in East Athe provision of medium to high density The development is spearheaded by the housing projects is one of the key solutions for Department of Human Settlements and is London, will provide 249 rental housing delivery in urban areas. managed by a social housing provider under opportunities. Located in the “For us to make a difference in the lives of the Social Housing Regulatory Authority. “Our people who fall within the GAP market - those mandate is to approve spaces with dignity CBD, the 9-storey building is who earn too much to qualify for free govern- where people can feel safe and thrive. We are close to all amenities. ment subsidy but also earn too little to apply afforded this function through an annual capi- tal grant which we receive from the Minister of Human Settlements,” said SHRA chairperson Zhora Ibrahim. The project was partially funded by the Na- tional Housing Finance Corporation and CEO, Samson Moraba added, “Affordability is key in these establishments, and ours is to ensure that we fund the best possible projects that will allow people to live in areas where they can be productive.” Southernwood Square consists of 57 bach- elor, 78 one bedroom and 114 two bedroom apartments. The project will provide housing for householders earning between R2 500 to R7 500 per month. During construction of the project, 140 jobs were created and 90 of these about this development. You must also high- were from the local community. light the positives and must tell us about the During the launch, some residents dem- good things that are happening here as well". onstrated their dissatisfaction on structural He also encouraged tenants to pay rent for defects of some units. Sexwale addressed this their units. "Things don't come for free and group and explained that they had a right to people must keep paying rent. Government voice their dissatisfaction. has a responsibility to provide human settle- "Clients must be satisfied and that is why ments as much as tenants have a responsibil- we are here, to listen and find out how they feel ity to pay rent.” housing Zuma’s plans for housing President Zuma’s State of the Nation Address has offered some housing relief for entry level home owners and end user finance. Housing in Southern Africa spoke to Nedbank Corporate Property Finance Head of Affordable Housing, Manie Annandale about the housing market. here are two key provisions that will and managed by the National Housing impact dramatically on the housing Finance Corporation. Tsector. The first is the new provision Annandale says, “We welcome the of a housing subsidy up to R87 000 the State of the Nation Address and the in- amount increased after the President’s crease in the Finance Linked Individual speech, which will assist income earn- Subsidy Programme (FLISP) for the gap ers of between R3 501 and R15 000, to market, but the biggest challenge is still obtain finance from an accredited bank. affordability for the end user. We try to The second is the National Housing ensure that we fund affordable housing. Finance Corporation, who will be rolling But it is still difficult to get stock in the out government’s R1 billion Mortgage R400 000 range. Annandale says the Default Insurance scheme, to enable the R87 000 subsidy is for the lowest income banks to lend to buyers in the R3 501 to range, the previous FLISP was on a slid- R15 000 income level. ing scale, with the higher income earner The mortgage default insurance qualifying for a smaller amount. pilot will be launched in April 2012 Annandale says that with the volatility in so many big markets, investors remain “The consumer wants the larg- cautious. “This doesn’t only apply to housing. It was recently mentioned that South Africa, we will continue to look “ ...the days of most of the est house at the lowest price corporates are sitting on cash - this is a at interest rates as the most effective R350 000 – R500 000 across symptom as they want to invest, but don’t weapon to counter it. This is not the ideal, costs being funded by the want to do it because of the uncertainty.” but it has proved to be the most effective banks are over.” the board.” To counter inflationary pressure in weapon against inflation. Reserve Bank Governor, Gill Marcus has suggested Olifantsfontein are strategically located. that perhaps it’s time to change tack on The developments are close to major monetary policy - it is time to look at other metros and amenities, and because of aspects of the economy. demand in the area, the investment is North West reduces The banks anticipate that the unsus- protected. Free standing units win hands tainable low interest rate levels will gradu- down over higher density options - the ally increase from prime at 9% to 11% by end user still prefers free standing when backlog the end of 2013. they buy. It is different when they rent as Annandale added that some of the key they don’t mind high density when rent- he North West Provincial Access to housing is a government prior- developers are Cosmopolitan Projects in ing. Even semi detached is selling well Government has made steady ity to ensure that everyone has the right Gauteng, Safrich in Soshanguve and New at Cosmopolitan’s Protea Glen project.” progress towards addressing to have adequate housing, as stipulated Age Properties in Cape Town. He says, “We are trying to find the most “T He cites, “Nedbank is funding Phase effective way of offering sustainable green housing backlog in the province,” says in the country’s constitution. the Province’s Premier, Thandi Modise. The Premier announced that the Three of the New Age Properties housing elements in our developments, this inevi- Addressing members of the Provin- provincial government would commence project in Mitchells Plain and delivering tably creates an additional expense. We cial Legislature and 3 500 guests at with the rental stock programme this units under R400 000. At Safrich’s Sos- are conducting investigations with Cos- the North West University’s Great Hall, year, which aims to provide secure, af- hanguve development, the integrated mopolitan Projects and looking at solar in Mahikeng, Modise said the province fordable rental stock for lower income settlement offers a variety of units from products that have been tried and tested.” had reduced the housing backlog from earners.